China property

By Ben Simpfendorfer of Silk Road Associates

The Yuecheng in Beijing’s southern suburbs is a pleasant looking senior living home. Its main living room is full of books, potted plants, and mahjong tables. Its bedrooms are bright and well equipped and little different from the rooms that many might be used to seeing in Europe or the US.

Indeed, to the casual observer, the Yuecheng appears to be a pin-up for the commercial opportunities of selling to China’s growing ranks of elderly people. But that’s why it’s also misleading. Continue reading »

Banks intensified their squeeze on mortgage borrowers in China in June, contributing to another sharp decline in real estate sales for the month and ratcheting up the pressure on several city government finances.

Data collected by China Confidential, a research service on China at the Financial Times, showed that only 5 per cent of first time buyers were able to secure a mortgage below the benchmark interest rate. This compared with 8 per cent in May and 39 per cent in June 2013, according to China Confidential’s monthly survey of 300 real estate developer sales offices in 40 cities across the country. Continue reading »

By Qu Hongbin, Co-Head of Asian Economic Research, HSBC

For many, China’s growth model, which has delivered average annual GDP growth of 10 per cent over the past three decades, simply looks wrong: a national savings rate of around 50 per cent is unheard of in a large, modern economy.

A typical diagnosis states that China invests too much and consumes too little. The prescription is “rebalancing” – moving the economy away from investment towards consumption-led growth. However, a consumption-led growth model has little in theory or evidence to support it. Continue reading »

More bad news for China’s property market. Not only is the People’s Daily quashing hopes for a real estate stimulus, but data from 42 of the country’s most significant cities is showing a declining trend for property sales in the first half of June.

Home sales from the 42 cities, monitored by China Confidential, fell 16 per cent in the first 15 days of the month from the same period in May. This followed some signs of recovery in May, when transactions rose 4 per cent month on month.

On a year on year basis, property unit sales fell 29 per cent, representing a deepening of the declining trend seen in May – when sales were down 14 per cent year on year – and in April, when sales were down 23 per cent. Continue reading »

As Jamil Anderlini, the FT’s Beijing bureau chief, wrote this week, China’s property bubble is on the point of bursting. But what is likely to happen next? Some bubbles expire with a resounding pop, others fizzle after a few pyrotechnics while still others deflate in a more stately manner over time.

The denouement of China’s real estate exuberance could play out in several ways and Beijing, as ever, can do much to influence events. But here is an attempt to isolate three particularly combustible areas – or “time bombs” – which could turn incendiary and detonate with a shower of collateral damage. Continue reading »

The torrent of bad news for Chinese property developers shows no sign of letting up.

Unsold floor space continued to surge in April. Two small developers are reported to be slipping into financial distress. The total net profits of 117 domestically-listed developers posted a 27 per cent decline in the first quarter to Rmb9.65bn. The bearishness of investment bank analysts, meanwhile, is plumbing new depths. Continue reading »

A manufacturer of construction materials has become the first Chinese company to default on a domestic junk bond, a state-owned Chinese newspaper said on Tuesday, compounding investor concerns over which mainland issuers could be next to miss debt repayment obligations.

Xuzhou Zhongsen Tonghao, based in the prosperous but highly indebted province of Jiangsu, was unable to meet interest payments on Rmb180m (US$29m) in bonds it sold to domestic investors last year, according to the 21st Century Business Herald, a state-owned newspaper. The missed interest payment was estimated at Rmb18m, given the 10 per cent coupon on the bond, and took place last Friday. Continue reading »

Real estate sales in China appear to have slumped during March, compounding investor concerns that more smaller, weaker property developers may be heading for debt defaults.

Data from 42 cities monitored by China Confidential, a research service at the Financial Times, showed that sales volumes during the first 23 days of March were down 34 per cent from the same period a year earlier. Continue reading »

Just when world markets need them least, new signs of underlying economic weakness are emerging from China.

Data from China Confidential, an FT research service on China, show that the real estate market – one of the key 2013 engines of Chinese growth – is starting to sputter. Continue reading »

There is nothing that the west – and we in the western media – love to hate more than when Chinese money threatens to take a chunk of the free media that we see as a cornerstone of our democracies. So when a Chinese recycling millionaire said he was buying the New York Times, we either squealed with outrage or denounced it as a publicity stunt (which it seems that it was). Continue reading »

Like its American counterpart, the Chinese dream remains a rather abstract idea. But that doesn’t stop the leadership in Beijing talking it up – it was a key theme during the recent party plenum.

So where better to see the dream in action than at a show home, designed to entice China’s newly-minted white-collar workers to part with piles of cash? Beyondbrics took a trip to the suburbs of Shenzhen too see how the latest in aspirational living is shaping up. Here are five things we learnt. Continue reading »

Working out what is going on in China’s property market is a tricky exercise.

Take data from the National Bureau of Statistics published on Tuesday. Of 70 cities measured, prices in 69 were on the up, some by 16-plus per cent year on year. That’s bubble territory, surely? But take a look at wages, inventories and developers’ sales and you might think the bubble is deflating or has even popped already. Continue reading »

China’s house prices are surging – sounds familiar, doesn’t it?

But even by the country’s standards, September’s figures are quite staggering. Five cities recorded year-on-year growth of over 16 per cent (Guangzhou, Shenzhen, Shanghai, Xiamen and Beijing). Compared to just six months ago, it looks pretty frothy. Continue reading »

My bubble's bigger than your bubble

Rising house prices and property bubbles are something of a UK obsession. But for all the help to buy worries, house prices rose by just 1.4 per cent year-on-year in the second quarter, according to estate agents Knight Frank.

The figure for London is much higher, of course. But for a housing boom of far greater magnitude, just take a look at Asia. Continue reading »

Li Ka-shing, Asia’s richest man, cancelled his conglomerate’s planned interim results press conference on Thursday for the first time in 10 years and a disposal of his Hong Kong-based supermarket chain ParknShop is under way. What is going on?

Li’s actions have caused a stir in Hong Kong, at least among the media. Reporters have been staking out his house and office building for days; a cameraman got hurt in the crush. But Hong Kongers need to relax. Continue reading »